Jul 21, 2016

How Amazon's Brand and Customer Experience Became Synonymous

Amazon has made a fetish of customer service, even defying Wall Street's chronic demand for better margins in order to invest in enhanced delivery capabilities.
That focus has permitted the company to expand, despite having to survive questions about the treatment of employees and destruction of entire swaths of the traditional global economy. There is a powerful lesson in that emphasis and the freedom it has given the company. JL

Scott Davis reports in Forbes:

Amazon regularly ranks at the top of every customer service poll, was
recently inducted into the customer service hall of fame, and was found
to be one of the most relevant brands to U.S. consumers. Imagine the levels of customer loyalty it will achieve if Alexa becomes as widely adopted as Siri. Amazon
is becoming the world leader in delivering on its
brand promise: being the “Earth’s biggest selection and being the
Earth’s most customer-centric company.”In talking with one of my colleagues last week, it was quite clear that he has a personal relationship with Alexa, the voice service that powers Amazon’s Echo. He talks to Alexa about the weather, flight delays, movie reviews, restaurant reservations, his son’s school projects and even what temperature he wants the room to be. My colleague readily admits the more he interacts with Alexa, the more she compels him to buy on Amazon, everything from music, movies, games, electronics and deals of the day to everyday household items. Alexa, in concert with Prime, has become more indispensable to his life than the once irreplaceable Siri ever was. Through Alexa, Amazon is creating an on-demand, personalized, signature experience that we will be talking about for years.
With Prime, Echo and its ever-broadening Web Service’s business, Amazon is slowly but surely becoming the world leader in delivering on its brand promise: being the “Earth’s biggest selection and being the Earth’s most customer-centric company.” In his annual letter to shareholders, Bezos humbly stated why Amazon continues to be so successful: “Our focus is on customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term, and the taking of professional pride in operational excellence.” Customer obsession is one of the hallmarks of brands that stand apart from the rest – think Apple, Southwest and Nordstrom. But Amazon is the one that other brands are obsessing over right now.

Amazon is betting that Alexa and Echo will be the catalysts that drive consumers to interact with and ultimately purchase more with Amazon and Prime than ever before. The smarter Alexa becomes at knowing your needs, preferences and behaviors, the better she is at delivering a seamless experience. And the better experience she delivers, the more indispensable she will become to consumers’ lives. Already, Amazon regularly ranks at the top of every customer service poll, was recently inducted into the customer service hall of fame, and was found to be one of the most relevant brands to U.S. consumers in our recent Brand Relevance Index. Imagine the levels of customer loyalty it will achieve if Alexa becomes as widely adopted as Siri.
As Amazon Prime Day has come and gone, Amazon finds itself sitting on another new record for number of Prime accounts. USA Todayreported: “The program had 63 million U.S. members at the end of June, bringing it to 52% of all Amazon customers in the United States, CIRP estimates. That’s an increase of 19 million members from a year ago. Prime customers are vital to Amazon’s bottom line because they spend on average about $1,200 per year, compared to about $500 per year for non-members, according to CIRP.”
As more Prime customers jump on the Amazon Echo bandwagon and meet Alexa for themselves, expect the number of new members to exponentially increase. The gap between members and non-members will likely grow as well as Amazon continues to beef up benefits for Prime membership. Also, a $1,000-per-share stock price for Amazon, or roughly double what it was just in March, seems more and more likely.
There is no arguing that we are living in an on-demand world, led by companies such as Uber Lyft, GrubHub and TelaDoc. But Amazon, through Alexa and its other business offerings, is redefining what my experience should be. Just a few years ago, being able to shout your credit card number into the air while you’re doing laundry and then have Tide delivered to your door within the hour seemed like science fiction, but Amazon is making that and other seamless experiences possible today.
Of course, that kind of service comes with trade-offs. Namely, consumers have to share personal information such as names, addresses, passwords and credit card numbers in order to enable these personalized experiences. While consumers’ willingness to trade in their cyber-security fears for a better on-demand branded customer experience is an important conversation to have, it is a different one than this.
Amazon has permanently redefined what customer experience should be, and put all other retailers, service providers and brand managers on notice that the game has changed once again. So what can other businesses learn from Amazon’s success, and how can competitors stop from falling further behind?
First, borrow the notion of customer obsession from Amazon, and double down on the audience that falls into your brand’s sweet spot. Remember, Amazon is built for the masses, but REI, for instance, is built for a niche segment of the market. Both have been successful by delivering an extraordinary customer experience tailored for their particular audience.
Second, be honest about what experience you are delivering today—from a customer perspective—and where there are opportunities for improvement. Technology can enable game-changing innovation, but not every company has to create its own version of Echo. Sephora’s Beauty Insider, its reward and loyalty program, helped transform Sephora into one of the most relevant retail brands today. Zappos, which is owned by Amazon, built its customer experience on human interactions laced with empathy. Although technology can greatly enhance the customer experience, it is not the only path to success. Many remarkable experiences are still powered by people, not algorithms.
Lastly, as Amazon continues to do, innovate at a pace that far outstrips your core competitors, and embrace failure as part of your journey. Jeff Bezos appropriately brags about the number of failures Amazon has had over time. Remember Auctions and zShops? They are great examples of failing fast but learning along the way. (They eventually led to Marketplace, one of Amazon’s hallmark offerings.) While Amazon’s epic success seems to put it in a category all its own, there are lessons every company can learn from the way it approaches customer experience.
Alexa is talking, are you listening?

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...